- Telefonica’s handset financing program will reduce the upfront cost of smartphones devices, lowering the digital gap to access for the latest mobile technologies
IDB Invest, the private sector institution of the Inter-American Development Bank (IDB) Group, grants an up to $50 million uncommitted revolving facility to support the handset financing program of Telefónica Ecuador. The program supports the acquisition of mobile handsets sold by Telefónica Ecuador by providing customers with the possibility of financing their smartphones.
This is the first time this financing is implemented in Ecuador. The operation is aimed at closing the digital gap by lowering the upfront costs of purchasing mobile handsets and increasing access to mobile broadband services. Smartphones are the entry point to mobile broadband, which provides consumers with access to multiple digital services, such as mobile banking, health and transportation.
IDB Invest’s financing is simpler and more flexible than traditional securitization programs, which require rating agencies, high legal fees and a significant time to develop. The project has a tenor of a total of six years which is above the average. The $50 million uncommitted revolving facility goes to a trust, which is incorporated in Ecuador for the purposes of purchasing from Telefónica Ecuador eligible receivables arising from the sale of mobile devices from the company to its customers.
About IDB Invest
IDB Invest, the private sector institution of the Inter-American Development Bank (IDB) Group, is a multilateral development bank committed to supporting Latin America and the Caribbean businesses. It finances sustainable enterprises and projects to achieve financial results that maximize economic, social and environmental development for the region. With a current portfolio of $11.2 billion under management and 330 clients in 23 countries, IDB Invest works across sectors to provide innovative financial solutions and advisory services that meet the evolving demands of its clients. As of November 2017, IDB Invest is the trade name of the Inter-American Investment Corporation.
About Telefónica Ecuador
Telefónica Ecuador is a wholly-owned subsidiary of Telefonica and the second largest mobile network operator (MNO) in Ecuador, with approximately 30 percent of the mobile telephony market and 4.8 million subscribers in 2017. The company is offering prepaid and postpaid mobile network services for the provision of competitive mobile services in 3G and 4G Long-Term Evolution. As part of its services, Telefónica Ecuador offers handset financing to its postpaid subscribers, whereby subscribers pay monthly installments.